Microsoft appeal of the Lindows trademark dispute was turned down. This could …

Lindows Inc. has been under a worldwide trademark lawsuit siege from Microsoft. A series of suits against the company centers on the similarity of the Lindows name to the Redmond company's trademarked Windows operating systems. In the aftermath of recent court losses in Europe, Lindows changed the international name of their LindowsOS operating system to Linspire. But Lindows received a big win from the 9th U.S. Circuit Court of Appeals on Monday when it denied a Microsoft appeal on instructions a lower court judge was to give jurors. The case has been sent back down to the U.S. District Court and the trial is set to proceed in the second half of 2004. This decision means Lindows has the upper hand in the current case and could eventually invalidate of the Windows trademark.

The appeal concerned how jurors were instructed to evaluate the generic-ness of the term "windows" in referring to GUI interfaces, and more importantly, when the term became generic. U.S. District Court judge John Coughenour was to instruct jurors that they should only decide whether "windows" was a generic term at the time Microsoft Windows 1.0 entered the market in 1985, not after. Microsoft was seeking the appeal because they wanted the jury to determine how the term "windows" was understood by the public today.

"The judge made clear that this issue would be controlling at trial and also made clear that he would instruct the jury that generic-ness should be determined by the circumstances existing prior to Windows 1.0 going to market.

And here's the kicker:

"The judge went even further, however, and stated that he would not instruct the jury that, if 'windows' was a generic term prior to November 1985, Microsoft could still have a protectable trademark so long as the 'primary significance' of the term wasn't generic.

What this means is that if a jury decides "windows" was a generic term before Windows 1.0 was released in November 1985, it would invalidate all of Microsoft's Windows and Windows-related trademarks and they would not receive any legal protections afforded by trademark statues. If that happens, anyone and their brother would be free to use the term windows in advertising operating systems, programs or what have you. Some experts believe that because the stakes are so huge and a decision could lead to endless appeals, a settlement will take place before "Thanksgiving of this year." Microsoft's Windows trademarks would remain intact, but Monday's appeals ruling and a subsequent settlement would leave Microsoft's position weak for initiating future trademark litigation and effectively make their U.S. trademarks useless.